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The Food and Drug Administration has rescinded an agreement with Amarin Corp. plc that investors once saw as virtually assuring the biotech firm's lead drug, Vascepa, would win regulatory approval for a wider market.
The Irish drug company, in a regulatory filing late Tuesday, said the FDA's move came after regulators determined that drugs similar to Vascepa had failed to demonstrate, when taken in combination with statins such as the cholesterol pill Lipitor, their ability to significantly cut the risk of patients developing major cardiovascular problems.
The news caused waves in financial markets, with some branding the FDA's move as unprecedented and others wondering if Amarin, whose research-and-development hub is in Groton, had been dealt a death blow.
"It's looking like a reaffirmation of the end of the road for Amarin as a company," said financial blogger Steve Rosenman on the site SeekingAlpha.
At close Wednesday, Amarin's stock price was down more than 13 percent, to $1.81 a share. The stock had been trading above $6 a little more than a week ago and flew over the $18 mark at its highest point two years ago.
The stock price had already been beaten down last week after the FDA's Endocrinologic and Metabolic Drugs Advisory Committee recommended in a 9-2 vote that the federal agency not immediately approve expanded use of Vascepa. The panel said not enough data had been presented about how the Vascepa-statin combination would improve patient outcomes.
The FDA was scheduled to rule by Dec. 20 on whether to approve Amarin's use in combination with statins for certain patient populations or require that a full study now under way be completed before considering a go-ahead. The study, known as ANCHOR, would likely not be fully completed and analyzed for another three years.
"So far, Amarin has enrolled some 7,000 patients of the required 8,000 patients, but completing the study will cost millions of dollars that the drugmaker may not have without going back to the financing trough," according to the blog Pharmalot. "And this raises the possibility, of course, that the trial will come to a halt."
No matter what the company decides to do, Amarin will have to survive for an extended period on cash it has on hand along with sales of Vascepa to the only group for which the pill has received FDA approval: patients with very high levels of fat in their blood.
"The FDA has practically cut off any of Amarin's possible catalysts for the next couple of years," said Sean Williams in a blog on TheMotleyFool site.
Vascepa sales have been trending upward, but were not expected to be able to sustain the company over the long haul, partly because its main competitor, GlaxoSmithKline's fish oil pill Lovaza, will be facing generic competition in the near future.
In response to the FDA's expected decision, Amarin announced last week that it would be cutting its worldwide workforce in half. It is unclear what these cuts will mean its Groton workforce, which a few years ago numbered about two dozen.